Majority of Docs Still Own Their Own Practices

Despite perceptions of corporatization of American medicine, more than half of surveyed physicians (53.2%) were self-employed in 2012, according to by the American Medical Association.

An even larger majority -- 60% -- worked in practices that were fully owned by physicians.

Just 5.8% of physicians who responded to the survey reported direct employment by a hospital. Even so, the proportion of physicians partly or directly employed by hospitals has increased by almost 50% in the past 5 years.

"To paraphrase Mark Twain, the reports of the death of private-practice medicine have been greatly exaggerated," AMA president Ardis Dee Hoven, MD, said in a statement. "These new data show that while there has been an increase in hospital employment, more than half of physicians were self-employed in 2012.

"Needed innovation in payment and delivery reform must recognize the wide range of practice types and sizes that exist today so all physicians can participate in the move to a more patient-centered system that rewards high-quality care and reduces costs."

The survey, part of the AMA's Policy Research Perspective series, continued the longstanding AMA practice of periodically assessing socioeconomic issues affecting physicians, including physician practice arrangement.

More than a few recent reports have forecast large and continuing declines in the proportion of physicians who are self-employed. For example, authors of a report from Accenture predicted that just 36% of physicians would be in independent practices by 2013, as compared with 57% in 2000.

A survey by the Medical Group Management Association led to the projection that the proportion of physicians working in practices owned by hospitals or integrated delivery systems would reach 49% by 2011. A study by the American Hospital Association showed a 32% increase in the number of physicians employed by community hospitals from 2000 to 2010.

And just last year the American College of Cardiology reported that the proportion of hospital-employed cardiologists increased from 11% in 2007 to 35% in 2012.

Results of prior AMA surveys showed that physician ownership of practices declined from 75.8% in 1983 to 72.1% in 1988. By 1994, 57.7% of physicians owned their practices. The figure increased to 61% in 2001. The 2007/2008 AMA survey showed that 61.1% of physicians remained self-employed.

Data for the latest AMA report came from the 2012 Physician Practice Benchmark Survey (PPBS), which comprised a random sample of post-residency physicians who provided patient care at least 20 hours weekly and were not employed by the federal government.

Of 14,750 physicians invited to participate in the PPBS, 3,466 (28%) completed the survey. The results showed that 53.2% of physicians were full or part owners of their practices in 2012, 41.8% were employed, and 5% were independent contractors.

Consistent with previous studies, the data showed that physician ownership of practices increased with age, ranging from 43.3% of physicians younger than 40 to 60% of those 55 and older. Physician ownership also was more common among men than women (59.6% versus 38.7%).

Other key findings:

Single-specialty group was the most common practice arrangement (45.5%), including among a majority of radiologists (57.3%), emergency physicians (57.3%), anesthesiologists (55.8%), and ob/gyns (52.7%)

18.4% of physicians were in solo practice, down from 40.5% in 1983, 29.3% in 1994, and 24.6% in the 2o07/2008 survey; psychiatrists were most likely to practice solo (30.4%)

About 60% of respondents worked in practices with fewer than 10 physicians

23.4% of physicians worked in practices that were at least partly owned by hospitals (14.7% in those that were wholly owned)

About 6% of physicians worked in practices owned by not-for-profit foundations

5.6% were directly employed by hospitals or hospital systems

"The data suggest that trends toward hospital employment observed in certain areas of the country are part of a national trend," report authors Carol K. Kane, PhD, senior economist at the AMA, and David W. Emmons, PhD, director of economics and health policy research at the AMA, said in their discussion of the results.

"Even so, we were not able to give a precise estimate of how the percentage of physicians working in hospital-owned practices has changed because comparable information was not collected in earlier physician surveys."

The authors concluded with observations about the survey findings' implications for healthcare reform.

"As we move forward, it should be recognized that physicians provide care in a wide range of practice types, sizes, and ownership arrangements," said Kane and Emmons. "While some physicians will easily be able to adapt to and engage in Accountable Care Organizations or other health delivery structures that emphasize greater integration and care coordination, for others it will prove more of a challenge."